The Industry’s Power 25 (part 3)

Kwik Trip CEO Donald Zietlow and his team at the La Crosse, Wis.-based Kwik Trip Inc. have built a well-oiled network of facilities and operations that support more than 380 Kwik Trip and Kwik Star stores in Wisconsin, Minnesota and Iowa.

The Kwik Trip brand started in a small Wisconsin town in 1965, and has stayed in the Zietlow family since. Today the chain commands every aspect of production and proprietary products sold in its stores, from the Kwikery Bake Shoppe items made in a state-of-the-art bakery to the Nature’s Touch dairy products processed at Kwik Trip’s dairy facility.

It also operates an ice plant, a water plant, a commissary that produces packaged sandwiches and other fresh products, as well as a 155,000-square-foot distribution center that supplies Kwik Trip stores with fresh pre-made meals.

The chain’s annual revenue is fast approaching $1 billion, and it’s aiming to grow by about 20 stores each year.

Kwik Trip also operates 40 Tobacco Outlet Plus stores and a handful of Hearty Platter cafes and restaurants. In April, the company teamed with Marshfield Clinic’s food safety lab to monitor food quality at Kwik Trip’s facilities, part of its ongoing commitment to excellence in foodservice.

Perhaps just as notable as its retail performance and its natural inclination to vertically integrate its every component, however, is Kwik Trip’s emphasis on its most prized resource: employees.

At CSD’s Chain of the Year dinner in October, Kwik Trip Vice President of Operations Support Steve Loehr lauded Zietlow for the value he has consistently placed on Kwik Trip’s 7,000 employees, from the executive leaders to the frontline workers. The chain invests time, money and ample resources to train and reward employees with out-of-state seminars and trips, while also offering a generous profit-sharing plan, performance-based raises, year-end bonuses and recognition for red-letter days like weddings, birthdays and retirements.

NACS continues to be one of the most dynamic industry associations in the country, representing more than 2,200 retail and 1,800 supplier company members. Heading the Alexandria, Va. association and its aggressive agenda against credit card fees and tobacco taxes is NACS President and CEO Hank Armour.

The past 12 months proved to be a challenging year for the economy. As the government gets more involved in the banking business in 2009 and credit card fees continue eating away at retail industry profits, NACS plans to intensify its fight for fairness.

"We’ve seen from their actions that the credit card companies will never volunteer to give up anything they value without a fight," Armour said. "It is clear that these companies will not cede anything until they are forced to, and we will continue to fight to give retailers a seat at the table in establishing fees.

In 2008, NACS recorded numerous success with its members, such as expanding its Industry Update Luncheon schedule and enhancing more established events like NACStech and the NACS Show. NACS also has led the effort to promote green, sustainable business practices with the "Congreenience store" at the NACS Show it recently published the NACS Green Toolkit. But its biggest victories were scored in the legislative field.

"In our most important fight in Congress, the Credit Card Fair Fee Act was successfully passed out of the House Judiciary Committee, and the legislation was also introduced in the Senate," Armour said. "With respect to motor fuels, price-gouging legislation—in a year of multiple and record price spikes—never made it into law, and mandates were defeated that would have required retailers to install E-85 fueling equipment instead of providing incentives for such installations. Also, legislation that would give the FDA regulatory authority over the marketing and retailing of tobacco products was significantly modified to address retailer concerns."

For 2009, Armour vowed to continue fighting for fair credit card fees, "and delivering knowledge and connections that offer compelling value to our members and improve their businesses."

NATO is a unique tobacco retail organization because it focuses on grassroots legislative advocacy on both the state and federal levels. If there is a tobacco-related bill being considered by a state legislature, NATO helps its retail members by alerting them of the bill, informing them of who their state legislators are, drafting letters for retailers to simply sign and send to their elected officials and providing petitions for their customers to sign, which are then sent the state legislators.

Under Executive Director Thomas Briant, NATO achieved several major accomplishments in 2008 including:

• An 80% success rate on state tobacco legislation by working with its members and industry allies to defeat or significantly amend cigarette and tobacco tax increases and smoking restrictions on the state level.

• Initiative on tobacco tax increases. During 2008, NATO initiated a nationwide effort to send a letter to all 7,100 state legislators and every state governor informing them of the diminishing returns from cigarette and tobacco taxes and recommended that they consider raising revenue from a source other than cigarettes and tobacco products.

• The association coordinated an unprecedented grassroots campaign to fight the federal tobacco tax increases being considered by Congress as a part of legislation to expand the State Children’s Health Insurance Program (SCHIP). The bill has been defeated for 2008, which was a major victory for the industry.

• Fought FDA legislation. NATO continue d its opposition to the legislation pending in Congress that would grant the Food and Drug Administration (FDA) the power to regulate tobacco products, focusing on the sweeping retail regulations that would significantly change and severely impact tobacco retailing.

NATO membership is open to all retailers who sell tobacco products, including tobacco stores, convenience stores, liquor stores, grocery stores and service stations.

Grady RosierPresident and CEOMcLane Co. Inc.

In a word, McLane Co. is a juggernaut in wholesale distribution, annually delivering hundreds of thousands of products—more than 10 billion pounds worth—to more than 60,000 retail locations in all 50 states.

To achieve its superior performance, the company has 37 distribution centers throughout the U.S., which serve a consumer base that’s scarcely rivaled throughout the entire industry.

Led by President and CEO Grady Rosier, who has been with the company since 1984 but was elevated to CEO in January 1995, McLane is endlessly evolving to provide c-store retailers of every size the tools they need to efficiently manage their business and realize their maximize revenue potential.

"The key to ensuring that a retailer has the proper product mix to maximize profitability starts with having an unbiased consumer-focused product recommendation," Rosier said. "This starts with the ability to have the right information from which to base your product selection."

McLane retailers can turn to the distributor’s category development team, which uses the McLane Mpulse system—the largest single c-store database in the industry.

"Through Mplulse we are capable of tracking sales performance for all wholesale-delivered products within a given geography, zip code, region, state, retailer—even down to store level," Rosier said. "Complementing this system is our utilization of a demographic profiling system, which allows us to better understand who the retail customer really is—gender, age, education, income and ethnicity."

Data crunching, however, is only a sliver of McLane’s category development process. The distributor complements the technology with a full staff of category experts who help retailers maximize their sales and profits.

At its Temple, Texas headquarters, McLane has a fully functional lab store that provides an environment where retailers, suppliers and McLane’s category team work on everything from full store layouts to simple planogram resets using traditional gondolas or virtual versions through Mclane’s live-image planogram software.

Richard Wake and Tom WakeCo-President and Co-CEOEby-Brown Co.

Eby-Brown has been led by members of the Wake family for almost 50 years. Founded in 1887, the company remains dedicated to providing the best possible service to its customers. For over 100 years, Eby-Brown has been a leading convenience store supplier and wholesale food distributor of more than 11,000 name-brand products.

Its $4.1 billion in sales make the company the second-largest tobacco, candy and convenience distributor in the country. Led by brothers Richard and Tom Wake, co-presidents and co-CEOs, Eby-Brown serves more than 12,000 retail locations from seven distribution centers and employs more than 2,100 people, making it the largest privately owned tobacco, candy, and convenience distributor in the U.S.

Upon taking over guidance responsibilities for the company from their parents, Richard and Tom Wake sat down and wrote what they described as their "Tree House Rules," maxims that have guided them personally since childhood and continue to guide the company they lead today.

Their rules include maintaining a sense of urgency, paying strict attention to details, following through on every transaction and interaction, and communicating constantly.

The Wake brothers hold their customers "second only to God." "We don’t ‘deal’ with customers, we worship them, make them our friends, and make them like us so much they don’t ever want to leave us," they said. " Our paychecks may say ‘Eby Brown’, but our customer is our employer."

The Wakes consider having fun an essential part of retaining top employees and maintaining their positive corporate culture.

"If we don’t enjoy our jobs and have fun doing them, we won’t be very good at them," Tom Wake said. "We share ideas on how to make employment more enjoyable for us all. That’s the Eby-Brown Culture."

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